QUARTERLY STATEMENT AS OF MARCH 31, 2020 · business unit EBIT from operational business up despite...

QUARTERLY STATEMENT

AS OF MARCH 31, 2020

WERDOHL, APRIL 30, 2020

Focused.

Dynamic.

Green.

DISCLAIMER

This presentation contains statements concerning the future business performance of the Vossloh Group that are based on assumptions and

estimates from the Company management. If the assumptions that the projections are based on fail to occur, the actual results of the projected

statements may differ substantially. Uncertainties include changes in the political, commercial and economic climate, the actions of competitors,

legislative reforms, the effects of future case law and fluctuations in exchange rates and interest rates. Vossloh and its Group companies,

consultants and representatives assume no responsibility for possible losses associated with the use of this presentation or its contents. Vossloh

assumes no obligation to update the forecast statements in this presentation.

The information contained in this presentation does not constitute an offer or an invitation to sell or buy Vossloh shares or the shares of other

companies.

NOTE

2 Quarterly Statement Q1/2020

VOSSLOH GROUP: FOCUSED. DYNAMIC. GREEN.GOOD START TO THE 2020 FISCAL YEAR

Quarterly Statement Q1/20203

OPERATIONAL BUSINESS

PERFORMANCE

Portfolio-adjusted sales of €177.5 million in the

previous year increased to €182.9 million, with higher

contributions especially from the Tie Technologies

business unit

EBIT from operational business up despite initial

negative impact of COVID-19; thanks to the positive

earnings effect resulting from a business combination

achieved in stages of a company in the Fastening

Systems business unit, EBIT came to €16.5 million

(previous year: €(0.6) million); 2019 performance

program taking effect

COVID-19 – CURRENT

SITUATION

Positive development in orders received continues;

Group’s book-to-bill ratio (ratio of orders received to

sales) at a high level of 1.6; book-to-bill ratio greater

than 1 in all business units

SALE OF VOSSLOH

LOCOMOTIVES

Federal Cartel Office (Bundeskartellamt) approval

issued without conditions; all contractual conditions

have been met

Employee protection policies and measures still in

place; high proportion of worldwide administrative

staff working from home; special safety precautions

implemented at production sites

Individual sites affected by temporary restrictions and

occasional production shutdowns; all key production

sites are operating or ramping up again

Stable position for Vossloh: highly crisis-resistant

industry; railway industry systemically relevant in many

countries (e.g. Germany, France, U.S.); most customers

from the public sector; business based largely on

maintenance and repairs

Initial negative financial impact in Q1/2020 mainly in

Customized Modules; further negative impact on

earnings likely to come in the course of the year;

dividend suspension proposed; further measures

taken to secure liquidity

Sale to be completed in the coming weeks

Sale secures the future of unprofitable locomotive

business and ends the long-standing outflow of

funds needed for further development of core

business

VOSSLOH GROUPDUE TO 2019 PERFORMANCE PROGRAM GOOD EARNINGS DEVELOPMENT IN FIRST QUARTER DESPITE COVID-19


KEY GROUP INDICATORS 1-3/2019 1-3/2020

Sales revenues € mill. 190.01 182.9

EBITDA/EBITDA margin € mill./% 12.2/6.4 28.8/15.7

EBIT/EBIT margin € mill./% (0.6)/(0.3) 16.5/9.0

Net income € mill. (22.5) (2.6)

Earnings per share € (1.50) (0.15)

Free cash flow2 € mill. (52.0) (50.2)

Capital expenditure € mill. 8.1 14.4

Value added € mill. (17.6) 1.6

NOTES

Portfolio-adjusted sales revenues up by approx. 3 percent despite initial impact

of COVID-19; increase in sales in Core Components and Lifecycle Solutions;

Customized Modules on a par with previous year in portfolio-adjusted terms

Significant improvement in EBIT and EBIT margin compared with the previous

year, particularly due to an earnings effect from a business combination achieved

in stages of a company in the Fastening Systems business unit; marked

improvement also in Customized Modules and Lifecycle Solutions

Net income up considerably over the previous year due to higher EBIT, on the

other hand burdened by continued weak operating profitability and impairment

in discontinued operations

Free cash flow in core business negative in Q1, as is typical for the season;

nevertheless, marked improvement compared with the previous year from

around €(41) million to current total of approximately €(20) million; free cash

flow from discontinued operations of around €(30) million due to extensive

processing of locomotives

Capital expenditure up considerably, particular increase in Lifecycle Solutions

and Customized Modules divisions

1Excluding sales from the U.S. businesses sold at the end of 2019, sales came to €177.5 million. 2Comprising effects from discontinued operations.

VOSSLOH GROUPEQUITY SLIGHTLY LOWER THAN END OF 2019, INCREASE IN NET FINANCIAL DEBT MAINLY DUE TO DISCONTINUED OPERATIONS


KEY GROUP INDICATORS1-3/2019

3/31/2019

2019

12/31/2019

1-3/2020

3/31/2020

Equity € mill. 503.4 403.6 392.9

Equity ratio % 34.9 30.3 28.6

Average working capital € mill. 237.9 227.2 185.3

Average working capital

intensity% 31.3 24.8 25.3

Closing working capital € mill. 259.9 180.3 190.3

Average capital employed € mill. 907.9 904.1 853.4

Closing capital employed € mill. 953.8 839.5 867.3

Net financial debt1 € mill. 370.7 321.3 386.4

NOTES

Equity slightly lower than end of 2019; due to negative currency effects and

slightly negative net income; equity ratio slightly lower also due to higher total

assets (mainly increase in assets held for sale)

Average working capital intensity down considerably on previous year’s

quarter due to lower average working capital in Customized Modules

Increase in closing capital employed compared with the end of 2019, also due

to higher working capital and expansion investments

Net financial debt up slightly compared with the end of Q1 2019 despite

positive FCF in core business of about €24 million in 12-month period; mainly

due to negative FCF of about €(64) million from discontinued operations,

interest, leasing and dividend payments affected; proceeds from capital increase

in mid-2019 and the sale of businesses as part of the 2019 performance program

had an offsetting effect

1Net financial debt before application of IFRS 16. Taking into account IFRS 16, net financial debt would increase by €46.9 million on 3/31/2020.

VOSSLOH GROUPVERY ENCOURAGING PERFORMANCE IN ORDERS RECEIVED, BOOK-TO-BILL AT 1.6


NOTES

Orders received up in all divisions, in Core Components largely due to good

order situation at Vossloh Tie Technologies; orders received by Customized

Modules also at a high level; book-to-bill ratio considerably greater than 1 in

all divisions, with Group ratio of 1.6

Vossloh Group’s order backlog up by 7.8 percent year-over-year;

Tie Technologies business unit (Core Components) up considerably over the

previous year; Customized Modules and Lifecycle Solutions more or less on

par with prior year

ORDERS RECEIVED (in € mill.) ORDER BACKLOG (in € mill.)

90.7107.9

131.51

147.7

36.4

38.4

1-3/2019 1-3/2020

252.51

291.9

256.0302.8

333.9

333.2

30.2

28.6

3/31/2019 3/31/2020

615.31663.3

Core Components Customized Modules Lifecycle Solutions

1For purposes of comparability, values are represented without U.S. businesses sold in 2019 (orders received adjusted by €28.5 million and order backlog adjusted by €70.8 million).

CORE COMPONENTS DIVISIONSALES UP BY 7.9 PERCENT OVER PREVIOUS YEAR, SIGNIFICANT POSITIVE INFLUENCE ON EARNINGS AND PROFITABILITY THROUGH EFFECT OF IAS 28


SALES (in € mill.)

72.077.7

1-3/2019 1-3/2020

EBIT (in € mill.)EBITDA (in € mill.)

Increase in sales (+7.9 percent) due to additional sales in Tie Technologies business unit

in the U.S. and Australia

EBIT and EBIT margin up considerably thanks to a gain from adapting to the fair value

of shares in Vossloh Anyang recognized in profit and loss, as part of a business

combination achieved in stages of this Chinese JV according to IAS 28 (€+15.6 million);

on the other hand start-up costs for concrete tie factories in Canada and Australia

ROCE(in %)

VALUE ADDED(in € mill.)

1-3/2019

1-3/2020

1-3/2019

1-3/2020

9.4

25.4

1.3

14.1

EBITDA MARGIN (in %)

11.5

24.7

1-3/2019 1-3/2020

EBIT MARGIN (in %)

15.9

31.8

1-3/2019 1-3/2020

6.5

19.4

1-3/2019 1-3/2020

9.0

25.0

1-3/2019 1-3/2020

FASTENING SYSTEMS BUSINESS UNITSALES ALMOST UNCHANGED IN COMPARISON WITH PREVIOUS YEAR, VALUE ADDED UP CONSIDERABLY THANKS TO CONSOLIDATION EFFECT



46.0 43.9

1-3/2019 1-3/2020

VALUE ADDED (in € mill.)

2.9

16.6

1-3/2019 1-3/2020

Project-related downturn in sales in Eastern Europe and China almost completely offset

by higher sales in Tanzania, the Middle East and the U.S.

Value added up considerably on previous year thanks to the effect from the business

combination achieved in stages; excluding this effect, slight decline due to sales

development

Book-to-bill ratio at 1.05; considerable volume of orders received in Italy and the U.S.;

high level of orders received for maintenance in China in the previous year

ORDERS

RECEIVED

(in € mill.)

ORDER

BACKLOG

(in € mill.)

1-3/2019

1-3/2020

3/31/2019

3/31/2020

61.3

46.3

206.4

184.8

TIE TECHNOLOGIES BUSINESS UNITSALES UP CONSIDERABLY, BOOK-TO-BILL AT 1.85



28.5

36.5

1-3/2019 1-3/2020

VALUE ADDED (in € mill.)

(1.6)(2.5)

1-3/2019 1-3/2020

Increase in sales largely due to higher sales contributions in Australia as a result of

processing of substantial order backlog (e.g. Rio Tinto order), higher sales also

generated in the U.S. (e.g. project in Florida)

Value added negatively affected by start-up costs for concrete tie factories in Canada

and Australia and ongoing effects from purchase price allocation

Book-to-bill ratio at very high level of 1.85; high level of orders received in the U.S.

in the transit business and for the Florida project, among others; continued positive

development in Australia as well; order backlog more than doubled

ORDERS

RECEIVED

(in € mill.)

ORDER

BACKLOG

(in € mill.)

1-3/2019

1-3/2020

3/31/2019

3/31/2020

32.0

67.5

54.0

123.9

CUSTOMIZED MODULES DIVISIONPORTFOLIO-ADJUSTED SALES1 ON A PAR WITH PREVIOUS YEAR DESPITE COVID-19, MARKED IMPROVEMENT IN EARNINGS AND PROFITABILITY


Drop in sales primarily due to loss of sales from sold U.S. businesses, comparable sales

on a par with prior year despite initial effects from the temporary closure of production

sites due to COVID-19

Marked improvement in earnings and profitability despite initial impact of COVID-19;

previous year included losses from businesses in the U.S. that have since been sold;

higher earnings contributions from Italy and Sweden

ROCE(in %)


1-3/2019

1-3/2020

1-3/2019

1-3/2020

(0.3)

2.0

(8.8)

(4.6)Book-to-bill ratio at 1.69; in particular, more orders received in Poland and Serbia


101.087.6

1-3/2019 1-3/2020

EBIT (in € mill.)EBITDA (in € mill.) EBITDA MARGIN (in %)

4.1 5.7

1-3/2019 1-3/2020

EBIT MARGIN (in %)

4.06.5

1-3/2019 1-3/2020

(0.3) 1.8

1-3/2019 1-3/2020

(0.3) 2.1

1-3/2019 1-3/2020

1Excluding sales from the U.S. businesses sold at the end of 2019, sales came to €88.5 million.

LIFECYCLE SOLUTIONS DIVISIONHIGHER SALES, IMPROVEMENT IN EARNINGS AND PROFITABILITY


ROCE(in %)


1-3/2019

1-3/2020

1-3/2019

1-3/2020

(5.7)

(4.0)

(6.0)

(5.0)

Higher sales in the area of logistics and good utilization levels in welding plants make

particular contribution to sales growth (+6.0 percent)

EBIT and EBIT margin negative, as is typical for the season, but up on previous year;

higher earnings contributions from logistics and stationary welding, countered by lower

earnings contributions from machine sales

Book-to-bill ratio at 1.9; good level of orders received in Sweden (Flexis), Germany

(mainly stationary welding and logistics), and in the Netherlands (milling)


19.1 20.2

1-3/2019 1-3/2020

EBIT (in € mill.)EBITDA (in € mill.) EBITDA MARGIN (in %)

0.7 1.1

1-3/2019 1-3/2020

EBIT MARGIN (in %)

3.6 5.6

1-3/2019 1-3/2020

(2.6)(1.8)

1-3/2019 1-3/2020

(13.6)(9.0)

1-3/2019 1-3/2020

VOSSLOH GROUPHIGHER SALES IN AUSTRALIA AND THE MIDDLE EAST PARTLY OFFSET LOWER SALES IN THE AMERICAS AND ASIA

12

THE AMERICAS EUROPE AFRICA & AUSTRALIA ASIA INCL. MIDDLE EAST(in € mill.) (in € mill.) (in € mill.) (in € mill.)

27 25

157

1-3/2019 1-3/2020

42

32

53 50

19 22

18 18

15 14

1-3/2019 1-3/2020

105 104

1 413

18

1-3/2019 1-3/2020

1422

2416

59

1-3/2019 1-3/2020

2925

U.S. Rest of the Americas Africa Australia Asia Middle EastWestern Europe Northern Europe

Southern Europe Eastern Europe

Lower sales in CM in the U.S. due to

portfolio-related factors partially offset

by higher sales at VTT and VFS; also

lower sales contributions from Canada

Lower sales in Western Europe

(in particular France) offset by higher

sales in Northern Europe (in particular

Finland)

Sales in Australia higher thanks to

VTT; higher contributions from Africa

(in particular Tanzania)

Lower sales mainly in China and

Malaysia, offset by higher sales

in Israel and the United Arab

Emirates


VOSSLOH GROUP, OUTLOOK1

NOTICEABLE INCREASE IN PROFITABILITY EXPECTED IN 2020


Sales

2019: €916.4 million 2020 forecast: €900 million to €1 billion

/ Missing sales due to the exit from the American switch business are expected to

be compensated by significantly higher sales, especially at Vossloh Fastening

Systems and Vossloh Tie Technologies

Value added

2019: €(105.4) million 2020 forecast: €0 to €15 million

/ In 2020, a return to positive value added levels is expected as a

result of improved profitability and lower average capital employed;

WACC down from 7.5 percent to 7.0 percent due to the persistently

low interest rate level

EBITDA margin

2019 (adjusted): 11.5 percent 2020 forecast: 12 to 13 percent

EBIT margin

2019 (adjusted): 6.1 percent 2020 forecast: 7 to 8 percent

/ Increase in profitability in particular due to improvements resulting from the

performance program; operational profitability still expected to increase in

Customized Modules and Lifecycle Solutions; slight drop in operational

profitability at Core Components due to COVID-19 is more than offset by the

effect from a business combination achieved in stages

1Based on current knowledge and a careful risk assessment, and with reference to the

obvious uncertainties regarding the further impact of the COVID-19 pandemic.

FINANCIAL CALENDAR AND CONTACT INFORMATIONHOW YOU CAN REACH US


Financial calendar 2020

/ May 27, 2020 Virtual Annual General Meeting

/ July 30, 2020 Interim report as of June 30, 2020

/ October 29, 2020 Quarterly statement as of September 30, 2020

Contact information for investors:

Dr. Daniel Gavranovic

Email: [email protected]

Phone: +49 (0) 23 92 / 52-609

Fax: +49 (0) 23 92 / 52-219

Contact information for the media:

Gundolf Moritz (Mirnock Consulting)

Email: [email protected]

Phone: +49 (0) 23 92 / 52-608

Fax: +49 (0) 23 92 / 52-219

THANK YOU FOR

YOUR TIME.

Q&A

Focused.

Dynamic.

Green.

NOTES


VOSSLOH GROUPINCOME STATEMENT


€ mill. 1-3/2019 1-3/2020

Sales revenues 190.0 182.9

Cost of sales (155.0) (147.4)

General administrative and selling expenses (36.0) (33.4)

Allowances for financial assets (0.0) (0.2)

Research and development costs (2.6) (2.3)

Other operating result 2.3 0.6

Operating result (1.3) 0.2

Income from investments in companies accounted for using the equity method 0.7 0.7

Other net financial result 0.0 15.6

Earnings before interest and taxes (EBIT) (0.6) 16.5

Interest income 0.3 1.8

Interest and similar expenses (6.1) (5.9)

Earnings before taxes (EBT) (6.4) 12.4

Income taxes 1.4 4.8

Result from continuing operations (5.0) 17.2

Result from discontinued operations (17.5) (19.8)

Net income (22.5) (2.6)

thereof attributable to shareholders of Vossloh AG (23.9) (2.7)

thereof attributable to noncontrolling interests 1.4 0.1

Earnings per share

Basic/diluted earnings per share (€) (1.50) (0.15)

thereof attributable to continuing operations (0.40) 0.97

thereof attributable to discontinued operations (1.10) (1.12)

VOSSLOH GROUPBALANCE SHEET


Assets (€ mill.) 3/31/2019 12/31/2019 3/31/2020

Intangible assets 304.0 280.1 295.5

Property, plant and equipment 313.0 296.8 301.7

Investment properties 2.3 1.8 1.8

Investments in companies accounted for using the equity method 66.9 74.6 71.6

Other noncurrent financial instruments 7.8 6.0 6.4

Other noncurrent assets 3.4 4.0 3.9

Deferred tax assets 18.1 17.7 25.5

Noncurrent assets 715.5 681.0 706.4

Inventories 207.5 152.1 166.4

Trade receivables 223.3 212.8 204.3

Contract assets 12.1 5.0 7.1

Income tax assets 7.3 5.8 6.5

Other current financial instruments 41.9 29.6 32.0

Other current assets 29.5 25.8 29.0

Short-term securities 0.4 0.0 0.0

Cash and cash equivalents 36.9 56.7 44.0

Current assets 558.9 487.8 489.3

Assets held for sale 168.9 162.6 177.8

Assets 1,443.3 1,331.4 1,373.5

Equity and liabilities (€ mill.) 3/31/2019 12/31/2019 3/31/2020

Capital stock 45.3 49.9 49.9

Additional paid-in capital 146.5 190.4 190.4

Retained earnings and net income 295.2 158.7 153.5

Accumulated other comprehensive income 3.8 (4.8) (14.0)

Equity excluding noncontrolling interests 490.8 394.2 379.8

Noncontrolling interests 12.6 9.4 13.1

Equity 503.4 403.6 392.9

Pension provisions/provisions for other post employment benefits 31.1 33.2 35.1

Other noncurrent provisions 8.1 10.5 8.3

Noncurrent financial liabilities 397.8 385.8 440.2

Noncurrent trade payables 0.0 1.4 0.0

Other noncurrent liabilities 10.9 10.6 3.3

Deferred tax liabilities 7.9 7.9 8.6

Noncurrent liabilities 455.8 449.4 495.5

Other current provisions 39.5 59.4 57.7

Current financial liabilities 66.3 41.3 37.2

Current trade payables 129.8 132.8 124.9

Current contract liabilities 0.0 0.2 0.0

Current income tax liabilities 2.3 4.4 3.5

Other current liabilities 102.9 91.7 109.9

Current liabilities 340.8 329.8 333.2

Liabilities related to assets held for sale 143.3 148.6 151.9

Equity and liabilities 1,443.3 1,331.4 1,373.5

VOSSLOH GROUPKEY PERFORMANCE INDICATORS


Core Components Fastening Systems Tie Technologies Customized Modules Lifecycle Solutions

1-3/2019 1-3/2020 1-3/2019 1-3/2020 1-3/2019 1-3/2020 1-3/2019 1-3/2020 1-3/2019 1-3/2020

Sales revenues € mill. 72.0 77.7 46.0 43.9 28.5 36.5 101.0 87.6 19.1 20.2

EBITDA € mill. 11.5 24.7 4.1 5.7 0.7 1.1

EBITDA margin % 15.9 31.8 4.0 6.5 3.6 5.6

EBIT € mill. 6.5 19.4 (0.3) 1.8 (2.6) (1.8)

EBIT margin % 9.0 25.0 (0.3) 2.1 (13.6) (9.0)

Average working capital € mill. 93.9 95.9 132.4 76.1 16.3 15.3

Average working capital intensity % 32.6 30.8 32.8 21.7 21.3 18.9

Average capital employed € mill. 276.1 306.6 453.3 362.9 180.5 182.7

ROCE % 9.4 25.4 (0.3) 2.0 (5.7) (4.0)

Value added € mill. 1.3 14.1 2.9 16.6 (1.6) (2.5) (8.8) (4.6) (6.0) (5.0)

Orders received € mill. 90.7 107.9 61.3 46.3 32.0 67.5 131.51 147.7 36.4 38.4

Order backlog (3/31) € mill. 256.0 302.8 206.4 184.8 54.0 123.9 333.91 333.2 30.2 28.6

Capital expenditure € mill. 4.3 4.8 2.7 3.0 1.6 1.8 1.1 3.5 2.7 5.8

Depreciation/amortization € mill. (5.0) (5.2) (2.0) (2.0) (3.0) (3.3) (4.4) (3.9) (3.3) (2.9)

1For the purpose of comparability, values are represented without US-businesses sold in 2019 (orders received adjusted by €28.5 million and order backlog adjusted by €70.8 million).

VOSSLOH GROUPCASH FLOW STATEMENT1


€ mill. 1-3/2019 1-3/2020

Earnings before interest and taxes (EBIT) (0.6) 16.5

EBIT from discontinued operations (18.7) (16.5)

Amortization/depreciation/impairment losses (less write-ups) of noncurrent assets 22.8 32.3

Change in noncurrent provisions 0.7 (0.4)

Gross cash flow 4.2 31.9

Income taxes paid (2.0) (3.8)

Change in working capital (43.3) (42.3)

Other changes (3.8) (22.3)

Cash flow from operating activities (44.9) (36.5)

Investments in intangible assets and property, plant and equipment (7.1) (13.6)

Investments in companies accounted for using the equity method 0.0 (0.1)

Free cash flow (52.0) (50.2)

1Also includes effects from discontinued operations.

VOSSLOH GROUPEMPLOYEES


Closing date Average

Employees 3/31/2019 3/31/2020 1-3/2019 1-3/2020

Core Components 879 911 877 910

Customized Modules 2,382 1,992 2,382 1,984

Lifecycle Solutions 552 507 546 518

Vossloh AG 63 60 63 60

Total 3,876 3,470 3,868 3,472

VOSSLOH GROUPPRICE PERFORMANCE, SHARE INFORMATION AND SHAREHOLDER STRUCTURE


Vossloh share price developments, 12/31/2019 to 3/31/2020

Vossloh share

SDAX (rebased)

DAX (rebased)

3/31/20202/29/20201/31/202012/31/2019

45

40

35

30

25

20

€

Information on the Vossloh share

ISIN DE0007667107

Trading locationsXetra, Düsseldorf, Frankfurt, Berlin, Hamburg,

Hanover, Stuttgart, Munich

Number of shares outstanding on 3/31/2020 17,564,180

Share price (3/31/2020) €31.60

High price/low price, January to March 2020 €42.50/€23.60

Market capitalization (3/31/2020) €555.0 million

Reuters code VOSG.DE

Bloomberg code VOS:GR

50.09

5.05

44.86

Heinz Hermann Thiele

Franklin Mutual Advisers

Others

Shareholder structure in %

MDAX (rebased)

QUARTERLY STATEMENT AS OF MARCH 31, 2020 · business unit EBIT from operational business up despite...

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